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So just hypothetically, if I was a total loving idiot and had ~40k of VTIVX in a taxable account that I was planning on using as a housing down payment in the next 2-5 years, and furthermore have only the vaguest idea where that house would be, when I'd be buying it, or how much the drat thing would cost... Supposing the above, would I be a bigger loving idiot to sell the VTIVX and deposit it into my high interest savings? Like, I realize now that it was a poor choice for something in the medium term (hadn't read the posts in this thread saying to p much always put stuff into a HISA if you plan on using it within 10 years), so do I: A) Current stock price only knocks me back to about August, so consider this an expensive lesson B) Wait for a dead-cat bounce and then do the above C) You fool, you buffoon, you bought target date stocks, and thus they remain eternally earmarked for prune juice and fishing gear Other info: Fiancee and I are HENRYs, (optometrist and computer-toucher, respectively), early 30's, NYC but family in CT, may be able to swing a house down payment over the next few years just contributing to savings and leaving the taxable stuff alone. Kids also hopefully coming in the next few years.
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Feb 28, 2020 17:45
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| # ? Jun 7, 2024 03:58 |
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What is a HENRY?
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Feb 28, 2020 17:48
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Head's Expecting Neck Removal, Yo
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Feb 28, 2020 17:49
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High Earners No Retirement Yolo
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Feb 28, 2020 17:50
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spwrozek posted:What is a HENRY? The millenials' version of a DINK.
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Feb 28, 2020 17:51
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High Earner, Not Rich Yet. In our case, ~120k/yr for me depending on bonus, about 140-160k for her, but she's got a good amount of student loan debt. I have no loans and have been able to max my 401k and Roth the last few years.
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Feb 28, 2020 17:51
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“Not rich yet” lmfao. If you are not rich yet, you are not rich period. In my opinion.
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Feb 28, 2020 17:54
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saintonan posted:The millenials' version of a DINK. I figured based on their jobs. I like the two responses above you though.
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Feb 28, 2020 17:54
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GoGoGadgetChris posted:Head's Expecting Neck Removal, Yo This one’s my favorite. (Not that I have room to talk, compared to the majority of US residents.)
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Feb 28, 2020 17:55
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Pollyanna posted:This one’s my favorite. (Not that I have room to talk, compared to the majority of US residents.) 
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Feb 28, 2020 17:57
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spwrozek posted:I figured based on their jobs. I like the two responses above you though. 
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Feb 28, 2020 18:00
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I’m maxing out my 401k and IRA contributions, what’s the next best place to put “don’t wanna think about it until retirement” money? Is it just buying value funds in a normal brokerage account or are there other good options?
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Feb 28, 2020 18:09
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raminasi posted:I’m maxing out my 401k and IRA contributions, what’s the next best place to put “don’t wanna think about it until retirement” money? Is it just buying value funds in a normal brokerage account or are there other good options?
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Feb 28, 2020 18:10
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raminasi posted:I’m maxing out my 401k and IRA contributions, what’s the next best place to put “don’t wanna think about it until retirement” money? Is it just buying value funds in a normal brokerage account or are there other good options? Listen to them, not me, but I was in this position almost a week ago. I put roughly $60k in VFIAX when I made the mistake of thinking it was an acceptable substitute to an Ally savings account (which I still need to set up  ), and IMO I would have been better served by throwing my hands up, claiming they were retirement funds from day one, and just putting that money in VFFVX (Target Date 2055) and treating it as another, taxable retirement fund. Now I need to build up money to invest in international stocks and US bonds to mimic the distribution in VFFVX, which will take some time.No HSA, haven’t tried mega backdoor Roth.
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Feb 28, 2020 18:24
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itsameta4 posted:A) Current stock price only knocks me back to about August, so consider this an expensive lesson No one knows the future. No one knows if a dead cat bounce is coming. No one knows if this is a brief correction and we'll make it back on Monday (this feels unlikely but no one knows) or the launch of a year long bear market or the launch of a lost decade in America, or the end of global capitalism and the beginning of a long slow slide into a new economic status quo, or a brief hiccup on the way to a post singularity total wealth explosion etc etc etc. Option B is gambling. You are picking A or C. You've already learned the first lesson which is that stocks are a good investment for the long term, not the short term. You'll learn that lesson whether or not you take the money out. The money is gone. The question is—given your current circumstances—what are your alternatives? If you don't take the money out, what would you do instead to make up the downpayment you are saving for? Can you afford to do that? Put another way, if this diminished pile of money was in your bank account and not the stock market, would you choose to invest it today? Would you be holding it in an HYSA and then saving up excess money to invest?
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Feb 28, 2020 18:28
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doingitwrong posted:You've already learned the first lesson which is that stocks are a good investment for the long term, not the short term. You'll learn that lesson whether or not you take the money out. The money is gone. Yeah, you never buy stocks intending to sell them soon. I have learned this lesson so many times and no matter what it's a tough pill to swallow.
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Feb 28, 2020 18:44
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itsameta4 posted:So just hypothetically, if I was a total loving idiot and had ~40k of VTIVX in a taxable account I would wait for the coronavirus stuff to shake out before making any moves. You guys at your income levels can toss together $40k no problem assuming you aren't drowning in debt obligations. Give it a year. Do some tax loss harvesting into VTSAX.
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Feb 28, 2020 18:54
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I can't wait for the day when I can just say "I've had enough investing, this is fine" and just put my long-term money into a CD or something like that, which in this fantasy world has enough interest to keep pace with inflation and I can just keep putting money into it. I feel like I've Four Pillared myself into compliance but not acceptance. Anyone else ever feel like this? I'm not selling, I'm going to keep investing at my steady pace per month and do everything I can to not check my portfolio, but it's just so drat hard to accept that my future is at the hands of the Pripyat School of Crisis Management.
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Feb 28, 2020 19:00
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doingitwrong posted:The question is—given your current circumstances—what are your alternatives? If you don't take the money out, what would you do instead to make up the downpayment you are saving for? Can you afford to do that? Put another way, if this diminished pile of money was in your bank account and not the stock market, would you choose to invest it today? Would you be holding it in an HYSA and then saving up excess money to invest? Definitely wouldn't be investing it knowing what I know now. That taxable account was started and filled over the course of a few years ago. Usually I'd just add whatever bonus money I got once a year after maxing my 401. Luckily I didn't actually touch it last year so I could rely on my yearly bonus as cash on hand for wedding expenses. The whole situation is really a matter of poorly understanding different investment time frames and goals. Ideally I'd have added it to a HYSA until I had a down payment amount I was comfortable with, and then taxable after that. The thing that really stings is that I've had a HYSA for years that I wasn't doing all that much with, and I really wanted to catch up for retirement, which is why I started the taxable in the first place once I was able to actually start packing money away every month. Was basically paycheck to paycheck until two or three years ago, since I graduated college in 2009. And I mean, altogether I'd rather be able to retire at some point than have a house in the next few years. Both would be best though, so it's not like I should wait til I have a few million socked away before house shopping. Man, this stuff gets tricky sometimes, huh?
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Feb 28, 2020 19:05
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jokes posted:Yeah, you never buy stocks intending to sell them soon. I have learned this lesson so many times and no matter what it's a tough pill to swallow. Yeah, it's been fun learning that "soon" covers a lot more time than I thought.
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Feb 28, 2020 19:09
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Lets say you max a Roth IRA, then withdraw some of that contribution during the same tax year. Are you then able to re-contribute up to the amount you withdrew before the end of that tax year? For example, contribute 6k, withdraw 3k, then contribute another 3k. 9k in contributions were made that year, but net contribution is 6k. Which matters wrt to the contribution limit?
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Feb 28, 2020 19:11
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itsameta4 posted:Definitely wouldn't be investing it knowing what I know now. That taxable account was started and filled over the course of a few years ago. Usually I'd just add whatever bonus money I got once a year after maxing my 401. If you have an uncertain timescale and a high risk tolerance, it's a fair choice... I made this move and came out ahead because my "well, maybe this should be a down payment" moment came last month. Once you actually have that money earmarked for medium-term spending, it's a bad choice. Going "gently caress, that could've been part of a down payment" when you haven't even been thinking about purchasing is just some post-hoc regret to a market downturn. The lesson is to think deeply about the purpose of your savings, not to avoid the market.
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Feb 28, 2020 19:16
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BRAKE FOR MOOSE posted:If you have an uncertain timescale and a high risk tolerance, it's a fair choice... I made this move and came out ahead because my "well, maybe this should be a down payment" moment came last month. Once you actually have that money earmarked for medium-term spending, it's a bad choice. Going "gently caress, that could've been part of a down payment" when you haven't even been thinking about purchasing is just some post-hoc regret to a market downturn. The lesson is to think deeply about the purpose of your savings, not to avoid the market. Yeah, it's been on my mind since maybe December, but I got sidetracked with the holidays and wedding planning. I think what I might do is maybe take out half or so and put it in the HYSA. I don't know, is that crazy though? It was all definitely originally meant to be retirement money, because I was like 10 years behind on saving and losing my poo poo. I guess my goals just shifted. A poster above was right though, we can probably just start future saving to a down-payment fund. Okay, that settles it. The taxable account is my "early catch-up" retirement money and that is good and okay and definitely not a waste. Excess money from here out though goes into house down payment in a HYSA. Thanks everybody! You guys are good.
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Feb 28, 2020 19:35
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paternity suitor posted:Part of Japan's problem is that their immigration policy has long been a Trumpian dream. Their country is literally dying because of it. If we want a preview of what this country could become if we close off our borders, look at Japan. Americans breed like rats we would have plenty of people. But I think locking out the educated people would definitely hurt the worst. The company I work for employs a high number of people in engineering fields with masters degrees or PhDs and a large number of them come from other countries.
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Feb 28, 2020 19:59
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itsameta4 posted:Yeah, it's been on my mind since maybe December, but I got sidetracked with the holidays and wedding planning. I think what I might do is maybe take out half or so and put it in the HYSA. Having the same struggle, just FYI, except not just $40k (around here, a shitbox 1BR will go for minimum $800k, so we'd need more like $300k liquid for a decent 2BR at $1.5m). Luckily we like our apartment so we can *hope* that the money rebounds some by next year and just stack cash in the interim. Sure sucks though, wish I'd moved things out a month or two ago, but we still aren't 100% certain we're buying so it felt bad paying the capital gains to move everything into a HYSA. So, you're not alone, and the situation sucks.
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Feb 28, 2020 19:59
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Splinter posted:Lets say you max a Roth IRA, then withdraw some of that contribution during the same tax year. Are you then able to re-contribute up to the amount you withdrew before the end of that tax year? No. You can contribute up to $6000/yr regardless of withdrawals. For an extreme example of what you cannot do: contribute 6k, withdraw 6k, +6k, -6k, etc. This is a Forbidden Maneuver.
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Feb 28, 2020 20:08
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Ropes4u posted:Americans breed like rats we would have plenty of people. american birthrates outside of recent immigrant communities are not real high
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Feb 28, 2020 20:31
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Maybe related to how having a kid costs like 10k to to 50k out of pocket?! Plus since nobody could afford to have a kid (big lol at this concept) until their mid 30s so just getting knocked up is another 30 to 60k of ivf America!
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Feb 28, 2020 20:35
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If you can only contribute $6k/yr how does the mega backdoor option work? This was the first year I needed to backdoor Roth, so I just put 6k into an empty IRA and pressed the button but I could have put in more. But if 6k is the max how do you stuff more in there?
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Feb 28, 2020 20:54
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GoGoGadgetChris posted:Maybe related to how having a kid costs like 10k to to 50k out of pocket?! Plus since nobody could afford to have a kid (big lol at this concept) until their mid 30s so just getting knocked up is another 30 to 60k of ivf Not really. In all industrialized countries with culturally-approved and legal access to birth control, population growth slows to a range that is just-above to just-below replacement level. America isn't special in this regard. People just prefer not to have more than 1-3 kids, with around 2 being the average, and because the death rate will never drop to 0, 2 children born per woman is below a break-even level. The global population crisis has been and continues to be a crisis of access to birth control.
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Feb 28, 2020 20:54
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Fhqwhgads posted:If you can only contribute $6k/yr how does the mega backdoor option work? This was the first year I needed to backdoor Roth, so I just put 6k into an empty IRA and pressed the button but I could have put in more. But if 6k is the max how do you stuff more in there? Contributions are money from your bank account. Transfers from other retirement accounts aren’t considered contributions and don’t have the income cutoffs that real contributions do (that is the “back door” loophole).
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Feb 28, 2020 20:58
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Fhqwhgads posted:If you can only contribute $6k/yr how does the mega backdoor option work? This was the first year I needed to backdoor Roth, so I just put 6k into an empty IRA and pressed the button but I could have put in more. But if 6k is the max how do you stuff more in there? Mega backdoor relies on some exceptions to the $6k limit. There's two I'm aware of: the employer-provided Roth (that is, "after-tax contributions") 401(k) with in-service rollovers allowed, and, the self-employed personal 401(k) in which the business makes contributions on top of the (sole) employee's 401(k) contributions. In both cases you can contribute up to the 401(k) limit and then roll over that money into the IRA. In the latter case, the normal $19k per year limit is blown away, because that limit only applies to the employee's contributions, and the employer can opt to pile in a huge amount more, up to $57k per year if the employee makes at least four times that amount in salary. These options only exist for people with quite high incomes and with very generous 401(k) options. But if you're self-employed as a high-earner, you can, perfectly legally, stuff literally millions of dollars into tax-advantaged status over the course of a couple decades of work, and this is actually a grotesque givaway to the rich that shouldn't exist but it does and as long as it does, we're gonna tell people in the thread to take advantage of it if they can. here's an article "for millenials" lol https://thecollegeinvestor.com/17561/understanding-the-mega-backdoor-roth-ira/ Leperflesh fucked around with this message at 21:02 on Feb 28, 2020 |
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Feb 28, 2020 20:58
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Fhqwhgads posted:If you can only contribute $6k/yr how does the mega backdoor option work? This was the first year I needed to backdoor Roth, so I just put 6k into an empty IRA and pressed the button but I could have put in more. But if 6k is the max how do you stuff more in there? Rollovers don't count as contributions. The contribution is to you Roth 401(k), which is based on combined 401(k) limits.
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Feb 28, 2020 21:00
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Gotcha, I do have five figures from a Roth 401k rolled into a Roth 401k but the choices are excellent so there's really no reason to, but if I wanted (and in service was allowed) then THAT would be what I could use for a mega backdoor into my Roth. But otherwise, as a regular wage slave there aren't really any other mega options.
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Feb 28, 2020 21:12
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Jows posted:I'll check out the form. Thanks. My active 401k is a Roth (trad for company match and ESOP contributions though), so I don't know if that would work. Maybe if it is offered they could roll it into the trad part? They likely could. My previous small company using ADP 401k allowed "reverse rollovers" (just realized I used the wrong terminology before) but some of the FAANGs do not.
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Feb 28, 2020 21:17
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So of course you should never time the market... buuuuuuuut... should I time the market? Should I just max the rest of my Roth IRA today while the market is down so much? It's gonna get maxed this year no matter what, the alternative is just to continue to let my autopay dollar cost average for the rest of the year until it's maxed. Technically lump sum beats dollar cost average normally right? I just happen to be doing the lump sum on a downswing. vvv lol I legit can't tell if you're serious or deadpanning me Elysium fucked around with this message at 21:22 on Feb 28, 2020 |
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Feb 28, 2020 21:18
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Elysium posted:So of course you should never time the market... buuuuuuuut... should I time the market? I think for you in particular it's different. So you should absolutely time the market.
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Feb 28, 2020 21:20
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Elysium posted:So of course you should never time the market... buuuuuuuut... should I time the market? Always Be Contributing. (just don’t go over)
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Feb 28, 2020 21:21
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Elysium posted:So of course you should never time the market... buuuuuuuut... should I time the market? If you can max your IRA immediately, you should. This is true regardless of the state of the market.
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Feb 28, 2020 21:28
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gently caress, I need to put in at least $3k to move the money I put in the IRA into VTSAX. Someone tell me what to do!
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Feb 28, 2020 21:37
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